Monday, August 08, 2016

How Central Bank Enabled Financialization 
Divided America
"During the 29 years after Alan Greenspan became Fed chairman in August 1987, the balance sheet of the Fed exploded from $200 billion to $4.5 trillion. Call that a 23X gain. That’s a pretty massive increase—so let’s see what else happened over that three-decade span. Well, according to Forbes, Warren Buffett’s net worth was $2.1 billion back in 1987 and it is now about $73 billion. Call that 35X .. The real truth is that Alan Greenspan and his successors turned a whole generation of financial gamblers into the greatest lottery winners in recorded history. They turned redistribution upside down——-sending unspeakable amounts of windfall wealth to the tippy top of the economic ladder .. The truth of the matter is that the better part of St. Warren’s fortune was manufactured in the Eccles Building. Even he backhandedly admitted as much in his famously unctuous and gratuitous letter thanking the Fed for bailing out the financial system (and his investment in Goldman, Well Fargo and other financial institutions) during the so-called 'financial crisis'."
- David Stockman*
link here to the essay

1 comment:

Anonymous said...

Notes From Underground: Taking Pulse of a Dead Market

2. In monitoring the power of the printing press I am posting a reference point put together by Karl of Vine Street Trading. It shows the top ten holdings of three large investment entities, the Swiss National Bank, Calpers and the Norge Bank, which holds for the Norwegian Sovereign Wealth Fund. The top six are the same stocks. The main difference between the SNB and the large entities is that the Swiss central bank does not have any major ownership in any U.S. banks. The conflict of interest would probably raise concerns from the U.S. authorities. The herding effect is rampant and the power of major global investors to influence equity prices is easily discerned.

SNB, Calpers, Norges Bank Holdings

A poignant point needs to be raised as my pulse races: How can global investors maintain buying SWISS FRANCS when the SNB is pursuing the greatest con since tulip bulbs, Mississippi Stock and any number of other events from the Madness of Crowds? The Swiss print currency and exchange the ever-increasing fiat paper for the assets of real corporations. Last month, the SNB–through currency market intervention–added roughly TEN BILLION to its balance sheet by exchanging Swiss francs for global stocks and bonds.